Bank assets could be bolstered through Islamic mortgages

Fri, 18 Nov 2011
Islamic mortgages could play a significant role in the increase in assets for Islamic banks over the next five years.

According to a new report from Deutsche Bank - which has more than 100,000 employees working in over 70 countries - these institutes may be boosted by nearly a doubling of assets over the next half-decade as a result of lending from European and US banks being significantly cut, Arab News reports.

This means borrowers are likely to seek alternative forms of financing, which could include Islamic mortgages.

The study revealed Saudi Arabia in particular is likely to be instrumental when home loan financing provides around $100 billion (£63 billion) in assets to the industry as a whole.

It was shown that global Islamic banking assets might exceed $1.8 trillion by the time 2016 draws to a close - a jump of 90 per cent on the $939 billion reported in 2010.

Jarmo Kotilaine, chief economist at the National Commercial Bank, said: "It is clear that Islamic financial institutions right now can also benefit from a benign environment for raising funding, especially in the area of sukuk."
Salaam-u-Allaikum
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